The Internet enables small businesses to emulate the bulk buying and online retail of large businesses, but they need global logistical support. That’s why I founded Shipwire in 2006. In my eyes, there are basically two versions of such a network: Fulfillment By Amazon’s walled garden (think iPhone), and Shipwire’s agnostic open platform (think Android). There have been a lot of upstarts as of late vertically integrating (think iPhone) at small scale, trying to compete with Fulfillment By Amazon, but I believe they will inevitably find those smaller customers to be unprofitable at large scale on a total net cost basis, and struggle with moving upstream to larger customers who will prefer an open platform.
Now in June 2019, Shopify announced the Shopify Fulfillment Network, and in September 2019 announced the acquisition of 6 Rivers warehouse robots. It will be interesting to see how Shopify threads the open vs closed (iPhone vs Android) needle. They clearly want all their customers to stay in the Shopify garden, but they lack the scale of an Amazon. And while I respect the acquisition of 6 Rivers as a good use of highly valued stock, it’s not earth shattering from a cost reduction or service level standpoint. In other words, the Shopify Fulfillment Network is “sticky,” and will likely work very decently to lock customers onto the platform, but I’m seeing more of an incremental revenue play that builds on their expansion into payments, rather than a full-blown logistics powerhouse.
Now I do believe there is immense U.S. growth opportunity for ecommerce logistics, as online continues eating into offline retail. However I’m more excited by the non-U.S. growth opportunity, where Amazon doesn’t have a toehold. For example, Home Depot, one of the largest retailers in the world, has almost zero footprint in Latin America, and I’m sure the lack of seamless logistics infrastructure across the continent is a reason.
Where do you see opportunities to export eCommerce logistics?